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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended October 31, 2021.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ____ to ____.
COMMISSION FILE NUMBER 001-09235
tho-20211031_g1.jpg
THOR INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware93-0768752
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
601 E. Beardsley Ave., Elkhart, IN
46514-3305
(Address of principal executive offices)(Zip Code)
(574) 970-7460
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each classTrading Symbol(s)on which registered
Common stock (Par value $.10 Per Share)THONew York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes        No    

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes        No    

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer                Accelerated filer            
Non-accelerated filer                      Smaller reporting company    
Emerging growth company    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes        No    
As of November 29, 2021, 55,618,549 shares of the registrant’s common stock, par value $0.10 per share, were outstanding.




PART I – FINANCIAL INFORMATION (Unless otherwise indicated, amounts in thousands except share and per share data.)
ITEM 1. FINANCIAL STATEMENTS
THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

October 31, 2021July 31, 2021
ASSETS
Current assets:
Cash and cash equivalents$336,237 $445,852 
Restricted cash
3,060 2,854 
Accounts receivable, trade, net1,095,970 796,489 
Accounts receivable, other, net70,403 153,443 
Inventories, net1,671,847 1,369,384 
Prepaid income taxes, expenses and other36,194 35,501 
Total current assets3,213,711 2,803,523 
 Property, plant and equipment, net1,218,023 1,185,131 
Other assets:
Goodwill1,915,388 1,563,255 
Amortizable intangible assets, net1,298,289 937,171 
Deferred income tax assets, net1,288 41,216 
Other122,072 123,792 
Total other assets3,337,037 2,665,434 
TOTAL ASSETS
$7,768,771 $6,654,088 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$1,055,342 $915,045 
Current portion of long-term debt12,159 12,411 
Short-term financial obligations19,398 25,720 
Accrued liabilities:
Compensation and related items
289,127 249,761 
Product warranties
290,617 267,620 
Income and other taxes
126,320 85,789 
Promotions and rebates
105,209 128,869 
Product, property and related liabilities38,692 38,590 
Dividends payable23,917  
Other
75,961 70,980 
Total current liabilities2,036,742 1,794,785 
Long-term debt2,232,266 1,594,821 
Deferred income tax liabilities, net149,811 113,598 
Unrecognized tax benefits19,925 15,844 
Other liabilities197,785 186,934 
Total long-term liabilities2,599,787 1,911,197 
Contingent liabilities and commitments
  
Stockholders’ equity:
Preferred stock – authorized 1,000,000 shares; none outstanding
  
Common stock – par value of $.10 per share; authorized 250,000,000 shares; issued 66,058,290 and 65,651,570 shares, respectively
6,606 6,565 
Additional paid-in capital473,775 460,482 
Retained earnings2,988,726 2,770,401 
Accumulated other comprehensive income, net of tax11,969 44,621 
Less treasury shares of 10,438,198 and 10,285,329, respectively, at cost
(378,237)(360,226)
Stockholders’ equity attributable to THOR Industries, Inc.3,102,839 2,921,843 
Non-controlling interests 29,403 26,263 
Total stockholders’ equity3,132,242 2,948,106 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$7,768,771 $6,654,088 
See Notes to the Condensed Consolidated Financial Statements.



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THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended October 31,
20212020
Net sales
$3,958,224 $2,537,360 
Cost of products sold3,302,800 2,158,508 
Gross profit655,424 378,852 
Selling, general and administrative expenses295,883 181,763 
Amortization of intangible assets
33,214 27,427 
Interest income193 318 
Interest expense20,913 24,276 
Other income, net7,235 615 
Income before income taxes312,842 146,319 
Income tax provision 68,039 30,680 
Net income 244,803 115,639 
Less: Net income attributable to non-controlling interests2,561 1,882 
Net income attributable to THOR Industries, Inc.$242,242 $113,757 
Weighted-average common shares outstanding:
Basic55,422,854 55,238,164 
Diluted55,790,712 55,554,682 
Earnings per common share:
Basic$4.37 $2.06 
Diluted$4.34 $2.05 
Comprehensive income:
Net income $244,803 $115,639 
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment(35,167)(18,993)
Unrealized gain on derivatives, net of tax2,355 3,332 
Total other comprehensive income (loss), net of tax(32,812)(15,661)
Total Comprehensive income 211,991 99,978 
Less: Comprehensive income attributable to non-controlling interests2,401 1,995 
Comprehensive income attributable to THOR Industries, Inc.$209,590 $97,983 




















See Notes to the Condensed Consolidated Financial Statements.



3



THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended October 31,
20212020
Cash flows from operating activities:
Net income$244,803 $115,639 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation31,739 26,812 
Amortization of intangible assets33,214 27,427 
Amortization of debt issuance costs2,424 2,723 
Deferred income tax (benefit) provision (5,253)4,601 
(Gain) loss on disposition of property, plant and equipment629 (79)
Stock-based compensation expense6,027 5,768 
Changes in assets and liabilities:
Accounts receivable(167,685)(36,495)
Inventories, net(236,915)(322,047)
Prepaid income taxes, expenses and other4,729 (14,857)
Accounts payable71,613 127,585 
Accrued liabilities50,016 (20,601)
Long-term liabilities and other6,451 2,234 
Net cash provided by (used in) operating activities41,792 (81,290)
Cash flows from investing activities:
Purchases of property, plant and equipment (43,224)(24,708)
Proceeds from dispositions of property, plant and equipment 141 975 
Business acquisitions, net of cash acquired(747,937)(22,700)
Net cash used in investing activities(791,020)(46,433)
Cash flows from financing activities:
Borrowings on revolving asset-based credit facilities660,088  
Payments on revolving asset-based credit facilities(500,000) 
Proceeds from issuance of senior unsecured notes500,000  
Payments on term-loan credit facilities (59,700)
Payments on other debt(1,959)(3,096)
Payments of debt issuance costs(8,445) 
Payments on finance lease obligations(262)(119)
Short-term financial obligations and other, net(5,825)(5,580)
Net cash provided by (used in) financing activities643,597 (68,495)
Effect of exchange rate changes on cash and cash equivalents and restricted cash(3,778)(4,935)
Net decrease in cash and cash equivalents and restricted cash(109,409)(201,153)
Cash and cash equivalents and restricted cash, beginning of period448,706 541,363 
Cash and cash equivalents and restricted cash, end of period339,297 340,210 
Less: restricted cash3,060 2,808 
Cash and cash equivalents, end of period$336,237 $337,402 
Supplemental cash flow information:
Income taxes paid$17,956 $48,788 
Interest paid$16,868 $18,207 
Non-cash investing and financing transactions:
Capital expenditures in accounts payable$4,320 $1,602 
Quarterly dividends payable$23,917 $22,700 





See Notes to the Condensed Consolidated Financial Statements.



4



THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED OCTOBER 31, 2021 AND 2020 (UNAUDITED)
Three Months Ended October 31, 2021
AccumulatedStockholders’
AdditionalOtherEquityNon-Total
Common StockPaid-InRetainedComprehensiveTreasury StockAttributablecontrollingStockholders’
SharesAmountCapitalEarningsIncome (Loss)SharesAmountto THORInterestsEquity
Balance at August 1, 202165,651,570 $6,565 $460,482 $2,770,401 $44,621 10,285,329 $(360,226)$2,921,843 $26,263 $2,948,106 
Net income — — — 242,242 — — — 242,242 2,561 244,803 
Restricted stock unit activity406,720 41 7,266 — — 152,869 (18,011)(10,704)— (10,704)
Dividends $0.43 per common share
— — — (23,917)— — — (23,917)— (23,917)
Stock-based compensation expense— — 6,027 — — — — 6,027 — 6,027 
Other comprehensive income (loss)— — — — (32,652)— — (32,652)(160)(32,812)
Acquisitions— — — — — — — — 739 739 
Balance at October 31, 202166,058,290 $6,606 $473,775 $2,988,726 $11,969 10,438,198 $(378,237)$3,102,839 $29,403 $3,132,242 

Three Months Ended October 31, 2020
AccumulatedStockholders’
AdditionalOtherEquityNon-Total
Common StockPaid-InRetainedComprehensiveTreasury StockAttributablecontrollingStockholders’
SharesAmountCapitalEarningsIncome (Loss)SharesAmountto THORInterestsEquity
Balance at August 1, 202065,396,531 $6,540 $436,828 $2,201,330 $26,993 10,197,775 $(351,909)$2,319,782 $25,787 $2,345,569 
Net income — — — 113,757 — — — 113,757 1,882 115,639 
Restricted stock unit activity255,039 25 198 — — 87,554 (8,317)(8,094)— (8,094)
Dividends $0.41 per common share
— — — (22,700)— — — (22,700)— (22,700)
Stock-based compensation expense— — 5,768 — — — — 5,768 — 5,768 
Other comprehensive income (loss)— — — — (15,774)— — (15,774)113 (15,661)
Balance at October 31, 202065,651,570 $6,565 $442,794 $2,292,387 $11,219 10,285,329 $(360,226)$2,392,739 $27,782 $2,420,521 





See Notes to the Condensed Consolidated Financial Statements.



5



NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(All U.S. Dollar, Euro and British Pound Sterling amounts presented in thousands except share and per share data or except as otherwise specified)

1. Nature of Operations and Accounting Policies

Nature of Operations

THOR Industries, Inc. was founded in 1980 and is the sole owner of operating subsidiaries (collectively, the “Company” or “THOR”), that, combined, represent the world's largest manufacturer of recreational vehicles (“RVs”). The Company manufactures a wide variety of RVs primarily in the United States and Europe and sells those vehicles, as well as related parts and accessories, primarily to independent, non-franchise dealers throughout the United States, Canada and Europe. The Company also sells component parts to both RV and original equipment manufacturers, including aluminum extruded components, and sells aftermarket component parts through dealers and retailers. Unless the context requires or indicates otherwise, all references to “THOR,” the “Company,” “we,” “our” and “us” refer to THOR Industries, Inc. and its subsidiaries.

The July 31, 2021 amounts are derived from the annual audited financial statements of THOR. The interim financial statements are unaudited. In the opinion of management, all adjustments (which consist of normal, recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented have been made. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2021. Due to seasonality within the recreational vehicle industry, and the impact of the ongoing COVID-19 pandemic and supply constraints on our industry, among other factors, annualizing the results of operations for the three months ended October 31, 2021 would not necessarily be indicative of the results expected for the full fiscal year.

2. Acquisitions

Airxcel

On September 1, 2021, the Company acquired Wichita, Kansas-based AirX Intermediate, Inc. (“Airxcel”). Airxcel manufactures a comprehensive line of high-quality component products which are sold primarily to original equipment RV manufacturers as well as consumers via aftermarket sales through dealers and retailers. Airxcel provides industry-leading products in recreational vehicle heating, cooling, ventilation, cooking, window coverings, sidewalls and roofing materials, among others. The purchase price of $750,000 in cash is subject to standard post-closing adjustments and was funded through a combination of cash-on-hand and $625,000 of borrowings from the Company’s asset-based credit facility (“ABL”). In conjunction with the Airxcel acquisition, the Company expanded its existing ABL facility from $750,000 to $1,000,000, favorably amended certain terms of the ABL agreement and extended the term of the ABL as discussed in Note 12 to the Condensed Consolidated Financial Statements. The interest rate remains unchanged.

The Company acquired Airxcel as part of its long-term, strategic growth plan and the acquisition is expected to provide numerous benefits, including strengthening the RV supply chain, diversifying its revenue sources and expanding Airxcel's supply chain business in North American and Europe. Airxcel will operate as an independent operation in the same manner as the Company's other subsidiaries.

The results of Airxcel are included in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income since the September 1, 2021 acquisition date. Airxcel recorded net sales of $88,778, net of intercompany sales, and net income before income taxes, net of intercompany profit elimination, was not material for the three months ended October 31, 2021. Net income before income taxes included a charge of $6,791 related to the step-up in assigned value of acquired Airxcel inventory that was included in cost of products sold in the current period, and also includes $2,184 in amortization expense related to the acquired intangible assets.


6



The following table summarizes the preliminary estimated fair values of the Airxcel net assets acquired on the acquisition date. The Company is in the process of conducting a fair value analysis. While all amounts remain subject to adjustment, the areas subject to the most significant potential adjustment are intangible assets, deferred income tax liabilities and certain accrued expenses. The Company expects to finalize these values as soon as practical and no later than one year from the acquisition date.

Cash$23,404 
Inventory71,150 
Other assets61,921 
Property, plant and equipment40,853 
Amortizable intangible assets:
Customer relationships284,000 
Trademarks56,900 
Design technology assets60,600 
Backlog700 
Goodwill368,639 
Current liabilities(109,336)
Deferred income tax liabilities(79,115)
Other liabilities(10,494)
Non-controlling interest(739)
Total fair value of net assets acquired768,483 
Less cash acquired(23,404)
Total cash consideration for acquisition, less cash acquired$745,079 

On the acquisition date, amortizable intangible assets had a weighted-average useful life of 18.3 years. The customer relationships were valued based on the Discounted Cash Flow Method and will be amortized on an accelerated basis over 20 years. The trademarks were valued on the Relief from Royalty Method and will be amortized on a straight-line basis over 20 years. The design technology assets were valued on the Relief from Royalty Method and will be amortized on a straight-line basis over 10 years. Backlog was valued based on the Discounted Cash Flow Method and will be amortized on a straight-line basis over 2 months. The vast majority of the goodwill recognized as a result of this transaction is not deductible for tax purposes.

Tiffin Group

On December 18, 2020, the Company acquired all of the issued and outstanding capital stock of luxury motorized recreational vehicle manufacturer Tiffin Motorhomes, Inc., including fifth wheel towable recreational vehicle manufacturer Vanleigh RV, and certain other associated operating and supply companies, which primarily supply component parts and services to Tiffin Motorhomes, Inc. and Vanleigh RV (collectively, the “Tiffin Group”). Tiffin Group, LLC, a wholly-owned subsidiary of the Company, owns the Tiffin Group. Tiffin Motorhomes, Inc. operates out of various locations in Alabama while Vanleigh RV operates out of Mississippi.

The initial cash consideration for the acquisition of the Tiffin Group was approximately $300,000, subject to adjustment, and was funded through existing cash-on-hand as well as $165,000 in borrowings from the Company’s existing asset-based credit facility.





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The following table summarizes the final fair values of the Tiffin Group net assets acquired on the acquisition date.

Cash$13,074 
Inventory116,441 
Other assets53,860 
Property, plant and equipment48,262 
Amortizable intangible assets:
Dealer network92,200 
Trademarks32,100 
Non-compete agreements1,400 
Backlog4,800 
Goodwill65,064 
Current liabilities(81,423)
Deferred income tax liabilities(37,263)
Other liabilities(7,203)
Total fair value of net assets acquired301,312 
Less cash acquired(13,074)
Total cash consideration for acquisition, less cash acquired$288,238 

On the acquisition date, amortizable intangible assets had a weighted-average useful life of 18.8 years. The dealer network was valued based on the Discounted Cash Flow Method and is being amortized on an accelerated basis over 18 to 20 years. The trademarks were valued on the Relief from Royalty Method and is being amortized on a straight-line basis over 20 years. Backlogs were valued based on the Discounted Cash Flow Method and were amortized on a straight-line basis over five to seven months. Generally, the goodwill recognized as a result of this transaction is not deductible for tax purposes.

The following unaudited pro forma information represents the Company’s results of operations as if the fiscal 2022 acquisition of Airxcel had occurred at the beginning of fiscal 2021 and the fiscal 2021 acquisition of the Tiffin Group had occurred at the beginning of fiscal 2020. These pro forma results may not be indicative of the actual results that would have occurred under the ownership and management of the Company.

Three Months EndedThree Months Ended
October 31, 2021October 31, 2020
Net sales$4,005,682 $2,813,236 
Net income attributable to THOR Industries, Inc.$249,055 $117,489 
Basic earnings per common share$4.49 $2.13 
Diluted earnings per common share$4.46 $2.11 



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3. Business Segments

The Company has three reportable segments, all related to recreational vehicles: (1) North American Towables, (2) North American Motorized and (3) European. The operations of the Company's Postle, Togo Group (rebranded as Roadpass Digital in November 2021) and recently acquired Airxcel subsidiaries are included in Other. Net sales included in Other related primarily to the sale of component parts and aluminum extrusions. Intercompany eliminations adjust for Postle and Airxcel sales to the Company’s North American towable and North American motorized segments, which are consummated at established transfer prices generally consistent with the selling prices of products to third parties.

The following tables reflect certain financial information by reportable segment:
Three Months Ended October 31,
NET SALES:20212020
Recreational vehicles
North American Towables$2,240,834$1,392,044
North American Motorized925,028493,855
Total North America3,165,8621,885,899
European632,997602,488
Total recreational vehicles3,798,8592,488,387
Other257,83080,707
Intercompany eliminations(98,465)(31,734)
Total$3,958,224$2,537,360

Three Months Ended October 31,
INCOME (LOSS) BEFORE INCOME TAXES:20212020
Recreational vehicles
North American Towables$266,282$141,179
North American Motorized88,89841,567
Total North America355,180182,746
European(17,976)(5,506)
Total recreational vehicles337,204177,240
Other, net23,52911,490
Corporate(47,891)(42,411)
Total$312,842$146,319

TOTAL ASSETS:October 31, 2021July 31, 2021
Recreational vehicles
North American Towables$2,137,149$1,870,577
North American Motorized1,244,2511,073,506
Total North America3,381,4002,944,083
European2,872,8282,975,821
Total recreational vehicles6,254,2285,919,904
Other1,223,899272,350
Corporate290,644461,834
Total$7,768,771$6,654,088



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DEPRECIATION AND INTANGIBLE AMORTIZATION EXPENSE:Three Months Ended October 31,
20212020
Recreational vehicles
North American Towables$16,302$15,807
North American Motorized7,0223,770
Total North America23,32419,577
European34,71331,323
Total recreational vehicles58,03750,900
Other
6,4802,911
Corporate
436428
Total$64,953$54,239

Three Months Ended October 31,
CAPITAL ACQUISITIONS:20212020
Recreational vehicles
North American Towables$13,134$9,408
North American Motorized8,6291,745
Total North America21,76311,153
European14,8029,894
Total recreational vehicles36,56521,047
Other
4,4171,444
Corporate
34361
Total$41,016$22,852

4. Earnings Per Common Share

The following table reflects the weighted-average common shares used to compute basic and diluted earnings per common share as included on the Condensed Consolidated Statements of Income and Comprehensive Income:

Three Months Ended October 31,
20212020
Weighted-average common shares outstanding for basic earnings per share
55,422,854 55,238,164 
Unvested restricted stock units and performance stock units367,858 316,518 
Weighted-average common shares outstanding assuming dilution
55,790,712 55,554,682 

The Company excluded 30,333 and 96,809 unvested restricted stock units and performance stock units that have an antidilutive effect from its calculation of weighted average shares outstanding assuming dilution at October 31, 2021 and October 31, 2020, respectively.




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5. Derivatives and Hedging

The fair value of our derivative instruments designated as cash flow hedges and the associated notional amounts, presented on a pre-tax basis, were as follows:
October 31, 2021July 31, 2021
Fair Value inFair Value in
Other CurrentOther Current
Cash Flow HedgesNotionalLiabilitiesNotionalLiabilities
Foreign currency forward contracts$20,674 $282 $41,899 $88 
Interest rate swap agreements432,250 8,033 482,138 11,420 
Total derivative financial instruments$452,924 $8,315 $524,037 $11,508 

Foreign currency forward contracts outstanding at October 31, 2021 are used to exchange British Pounds Sterling (“GBP”) for Euro. The total notional value of these contracts, including designated hedges and other contracts not designated, at October 31, 2021 is 15,000 GBP ($20,674), and these contracts have various maturity dates through January 31, 2022.

The Company entered into interest rate swaps to convert a portion of the Company’s long-term debt from floating rate to fixed rate debt. As of October 31, 2021, the outstanding swaps had notional contract values of $432,250, partially hedging the interest rate risk related to the Company’s U.S. dollar term loan tranche that matures in February 2026. The Company’s other interest rate swaps not designated as hedging instruments had a notional contract value of $31,168 at October 31, 2021.

Net Investment Hedges

The foreign currency transaction gains and losses on the Euro-denominated portion of the term loan, which is designated and effective as a hedge of the Company’s net investment in its Euro-denominated functional currency subsidiaries, are included as a component of the foreign currency translation adjustment. Gains for the three months ended October 31, 2021, net of tax, were $9,240. Gains for the three months ended October 31, 2020, net of tax, were $5,482.

There were no amounts reclassified out of accumulated other comprehensive income (“AOCI”) pertaining to the net investment hedge during the three-month periods ended October 31, 2021 and October 31, 2020, respectively.

Derivatives Not Designated as Hedging Instruments

The Company has certain other derivative instruments which have not been designated as hedges. These other derivative instruments had a notional amount totaling approximately $31,168 and a fair value of $1,786, which is included in Other current liabilities in the Condensed Consolidated Balance Sheet as of October 31, 2021. These other derivative instruments had a notional amount totaling approximately $32,466 and a fair value of $1,948, as of July 31, 2021. For these derivative instruments, changes in fair value are recognized in earnings.

The total amounts presented in the Condensed Consolidated Statements of Income and Comprehensive Income due to changes in the fair value of the following derivative instruments are as follows:

Three Months Ended October 31,
20212020
Gain (Loss) on Derivatives Designated as Cash Flow Hedges
Gain (Loss) recognized in Other Comprehensive Income, net of tax
Foreign currency forward contracts$(141)$ 
Interest rate swap agreements (1)
2,496 3,332 
Total gain (loss)$2,355 $3,332 

(1)Other comprehensive income (loss), net of tax, before reclassification from AOCI was $607 and $558 for the three months ended October 31, 2021 and 2020, respectively.




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Three Months Ended October 31,
20212020
 Interest Interest
SalesExpenseSalesExpense
Gain (Loss) Reclassified from AOCI, Net of Tax
Foreign currency forward contracts$(13)$ $ $ 
Interest rate swap agreements (1,889) (2,774)
Gain (Loss) on Derivatives Not Designated as Hedging Instruments
Amount of loss recognized in income, net of tax
Interest rate swap agreements 87  (38)
Total gain (loss)$(13)$(1,802)$ $(2,812)

6. Inventories

Major classifications of inventories are as follows:
October 31, 2021July 31, 2021
Finished goods – RV$124,858 $114,843 
Finished goods – other93,452 57,810 
Work in process432,513 376,594 
Raw materials706,689 602,106 
Chassis392,575 292,921 
Subtotal
1,750,087 1,444,274 
Excess of FIFO costs over LIFO costs(78,240)(74,890)
Total inventories, net$1,671,847 $1,369,384 

Of the $1,750,087 and $1,444,274 of inventories at October 31, 2021 and July 31, 2021, $1,086,598 and $946,767, respectively, were valued on the first-in, first-out (“FIFO”) method, and $663,489 and $497,507, respectively, were valued on the last-in, first-out (“LIFO”) method.

7. Property, Plant and Equipment

Property, plant and equipment consists of the following:
October 31, 2021July 31, 2021
Land$149,202 $142,746 
Buildings and improvements847,315 837,065 
Machinery and equipment568,617 523,714 
Rental vehicles69,748 75,449 
Lease right-of-use assets – operating47,335 42,601 
Lease right-of-use assets – finance6,823 7,010 
Total cost1,689,040 1,628,585 
Less accumulated depreciation(471,017)(443,454)
Property, plant and equipment, net$1,218,023 $1,185,131 

See Note 15 to the Condensed Consolidated Financial Statements for further information regarding the lease right-of-use assets.




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8. Intangible Assets and Goodwill

The components of amortizable intangible assets are as follows:

October 31, 2021July 31, 2021
Accumulated
Accumulated
CostAmortizationCost
Amortization
Dealer networks/customer relationships
$1,139,935 $347,875 $861,562 $327,751 
Trademarks
366,152 66,670 311,208 62,675 
Design technology and other intangibles
273,37067,615215,95662,237
Non-compete agreements
1,4004081,400292
Total amortizable intangible assets
$1,780,857 $482,568 $1,390,126 $452,955 

Estimated future amortization expense is as follows:

For the remainder of the fiscal year ending July 31, 2022$126,544
For the fiscal year ending July 31, 2023147,390
For the fiscal year ending July 31, 2024134,611
For the fiscal year ending July 31, 2025122,120
For the fiscal year ending July 31, 2026110,251
For the fiscal year ending July 31, 2027 and thereafter657,373
$1,298,289

Changes in the carrying amount of goodwill for the three months ended October 31, 2021 are summarized as follows:

North American TowablesNorth American MotorizedEuropeanOtherTotal
Net balance as of August 1, 2021$344,975 $53,875 $1,041,697 $122,708 $1,563,255 
Fiscal 2022 activity:
Goodwill acquired   373,685 373,685 
Foreign currency translation   (21,552) (21,552)
Net balance as of October 31, 2021$344,975 $53,875 $1,020,145 $496,393 $1,915,388 

Changes in the carrying amount of goodwill for the three months ended October 31, 2020 are summarized as follows:

North American TowablesNorth American MotorizedEuropeanOtherTotal
Net balance as of August 1, 2020$333,786 $ $1,037,929 $104,826 $1,476,541 
Fiscal 2021 activity:
Goodwill acquired   17,882 17,882 
Foreign currency translation  (13,140)